The role of immigration policy changes and the potential impact for care costs in Personal Injury claims

With approximately 25% of the of the adult social care workforce being made up of non-British workers in 2024, the recent changes to the UK's immigration policies are expected to significantly impact the health and social care sector.

This, together with a notable decrease in net migration has created substantial challenges in terms of recruiting and retaining staff, which in turn may have an impact on the level of damages in personal injury claims, particularly those in the catastrophic injury and large loss sphere.

According to Governmanet statistics, in the year ending March 2025 there were 23,000 health and care worker visas granted to main applicants, this being 85% fewer than the peak in 2023 which followed the addition of care workers to the shortage occupation list. The chart below, taken from the Government website, provides a visual representation of the rise and fall in the new health and care worker visa applications, along with some dates of notable policy changes.

Key Immigration Changes

Whilst this article does not look in detail at what the changes to the immigration policy are, some key changes which directly impact care workers include:

• Stricter visa requirements - Care providers who want to recruit a new worker from overseas will have to first prove that they have attempted to recruit a worker from within England who needs new sponsorship. However, of note, the crackdown on rogue care providers has seen around 40,000 workers displaced, many of whom are ready to rejoin the workforce.

• The Immigration White Paper, published 12 May 2025, outlines:

  • An end to overseas recruitment for care worker visas. For a transition period until 2028 visa extensions will be permitted, as will in-country switching for those already here.

  • Increasing the eligibility period for indefinite leave to remain from 5 to 10 years under the point-based system for many.

• Since March 2024:

  • Care workers have been restricted from bringing dependants.

  • Care providers are required to register the Care Quality Commission (CQC), in order to crack down on worker exploitation and abuse within the sector.

• The minimum salary threshold for skilled workers will increase to £12.82 per hour, or £25,000 per annum, from £23,200.

What impact will this have?

These changes will naturally impact on care providers’ ability to meet their staffing needs. As these policy changes come into effect, it is essential to understand the potential impact on care costs, which in turn may impact personal injury settlements.

In the short term a smaller pool of care workers and restrictions on overseas recruitment will naturally lead to recruitment competition, higher recruitment costs, and higher wages to attract workers. With the offer of higher wages, it is also possible that staff retention will become more difficult, as care workers will understandably be more inclined to change employment to secure higher wages. As a result, the overall costs of care services are likely to rise, impacting the overall expenses in personal injury claims.

In addition, whilst a clampdown on non-compliance and exploitation within the sector can only ever be a move in the right direction, this does mean that care providers will need to adapt to new regulations, which will likely require additional administrative efforts and costs. Again, the result is that the overall costs of care services are likely to rise.

In the medium term, we should start to see stabilisation as the care providers adjust to the new rules and develop effective strategies. Whilst in the longer term this may assist with the increased costs likely to be seen when setting up new processes to deal with the changes, in this earlier phase costs are likely to continue to be higher.

In addition, the clampdown on non-compliance and exploitation could lead to a higher quality of care. Whilst this is a positive, this is likely to come with increased costs in terms of training and wages.

For longer term considerations, care providers and the personal injury industry will need to continuously monitor any further changes to immigration policies. Any future changes could impact the stresses and costs in the care sector negatively or positively, which in turn will have an impact on settlements in personal injury claims.

In considering what can be done to help balance these increasing costs, we live in a world with continually advancing technology and AI. In an attempt to alleviate the ever-increasing stresses and costs, the care sector will no doubt increasingly look toward new technology to improve both efficiency and the quality of care being provided. This can also have the added benefit of increasing a person’s independence and the level of intrusion in their life. This could be something as simple as new and/or improved aids and equipment to assist with transfers and lifting or to automate some more simple tasks, such as closing curtains.

Conclusion

The recent changes to immigration policies and reduced migration rates are expected to result in higher care costs, particularly in the short to medium term. Those involved in personal injury claims where there is a need for care will need to monitor developments that follow and the potential impact.

In the longer term, care costs should start to stabilise, particularly as we continue to embrace assistive technology and AI. These advancements have the potential to improve efficiency and the quality of care, which could help mitigate some of the increased costs while also enhancing the independence and quality of life for those in need of care. However, in the immediate future there will be a period of adjustment and financial implications.

Last year, as part of our Care costs campaign, we carried out a full review of the Costs of Care (The Cost of Care – Navigating the Storm). Across the board, the experts who responded to our survey were fairly consistent in their view of rising care costs. We can only speculate but a real concern is that these changes will lead to further stress on an industry already close to breaking point and to further increases in the cost of services.

Close and detailed tracking of rates claimed – and actually recovered – for various care services, by regions and by agency provision or direct employment, could provide compensators with invaluable data in seeking to control ever-increasing rates in schedules of claim.

It is crucial for the personal injury insurance industry to explore emerging technologies and innovative care solutions on a case-by-case basis. By collaborating with appropriate experts, insurers can identify opportunities to manage financial pressures whilst also ensuring that claimants receive the best possible care.

Finally, it is crucial to continuously monitor immigration policy developments. Future policy changes could either mitigate or intensify the challenges faced by the care sector. Staying informed and adaptable will be vital for both care providers and the personal injury insurance industry to navigate these changes effectively.